Lufthansa Cargo chief rejects pressure to fly to Siberia UPDATE

(updating with further company statements, media reports)

BERLIN (Thomson Financial) - The head of Lufthansa Cargo, part of Deutsche Lufthansa AG, has refused to accept the relocation of its central Asia hub from Kazakhstan to Siberia as a done deal, saying the Russian airport Moscow wants it to use is unsafe.

'Rerouting our flights to the airport in question in Siberia would at the moment not be possible for operational reasons because it lacks the necessary technical infrastructure,' Carsten Spohr told Welt am Sonntag newspaper.

'It will, for example, be out of the question to land there during bad weather, such as thick fog,' he added.

Meanwhile, a Lufthansa spokesman told Frankfurter Allgemeine Zeitung to shift Lufthansa Cargo's hub to Krasnojarsk would take two years.

The newspaper also reported in an excerpt of an article to be published tomorrow that Lufthansa's Germanwings unit has been harassed by Russian civil aviation authorities when landing at Moscow's Wnukowo airport.

The report, which does not quote sources, said Russian authorities want Lufthansa to move to state-owned Sheremetjewo airport.

Sueddeutsche Zeitung reported on Saturday that Russian airline Aeroflot depends on the over-flight fees paid by European airlines, which amount to 300 mln eur per year.

Sohr said Lufthansa Cargo, the freight division of Germany's biggest airline, also rejected strong-arm tactics used by Russia to try and persuade the carrier to relocate its Asian hub from Astana in Kazakhstan to Krasnoyarsk airport.

Moscow last week banned Lufthansa Cargo from using Russian airspace after a permit allowing the airline to fly over the country expired, forcing its planes to make a costly detour en route to Astana.

'It is a strange move, ostensibly trying to force us to move our Asian hub from Astana to Siberia by revoking our overflight rights,' Sohr said.

'As a matter of principle, we cannot accept the one thing being made dependent on the other.'

Sohr said Russia's overflight ban and its request for Lufthansa Cargo to move its refueling and distribution point to Siberia came 'as a complete surprise.'

Transport Minister Wolfgang Tiefensee on Friday suggested that Germany has accepted the transfer of Lufthansa Cargo's central Asian hub from Kazakhstan to Siberia after bilateral negotiations.

'Discussions with the Russian transport ministry continue. At this time, it is above all a question of a timetable for the transfer of Lufthansa Cargo towards the Russian airport of Krasnoyarsk,' Tiefensee said.

The Russian transport ministry agreed on Friday to extend a temporary authorisation, allowing Lufthansa Cargo to resume flights over the country until November 15.

Tiefensee said a precondition for a final accord was 'the creation of infrastructure to enable flights to that airport (Krasnoyarsk) in any weather condition.'

Sohr said he expected the government to seek an 'empathic guarantee' of its right to fly over Russian territory in the long term, regardless of the outcome of negotiations on moving the Asian air hub.

He said the company suffered losses last week because return flights to Astana took three hours longer than usual because of the ban.

In the long-term, a ban could affect the interests of German exporters, he warned. [e-mail] wj/fr1/wj COPYRIGHT Copyright Thomson Financial News Limited 2007. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.